Chambal Fert. (CHAMBLFERT)
CyclicalFairStock Score: 85/100 — HIGH CONVICTION
Score breakdown: P/E: 3/3 · ROCE: 2/2 · Growth: 1/2 · Dividend: 1/1
Key Financials
| Current Price | ₹442.7 |
| Market Cap | ₹17,736.88 Cr |
| P/E Ratio | 9.2 |
| ROCE | 26.76% |
| ROE | 21.93% |
| Dividend Yield | 2.71% |
| Profit Growth | 10.27% |
| Debt/Equity | 0.1 |
| Sales Growth | -11.2% |
| Free Cash Flow | ₹2,133 Cr |
| Promoter Holding | 60.85% |
| 52-Week Range | ₹399.75 — ₹559 |
| Sector | Fertilizers & Agrochemicals |
| Book Value | ₹260.11 |
Strengths
- High ROE of 21.93% and ROCE of 26.76% demonstrate exceptional capital efficiency.
- Near-zero debt (D/E 0.01) provides immense financial stability.
- Strong free cash flow of ₹2,133 Cr against a ₹18,480 Cr market cap.
- Attractive valuation: P/E 9.65, PEG 1.03, and Graham Number ₹480.68 near price.
- Promoter holding of 60.85% ensures aligned interests.
Concerns
- Fertiliser business is cyclical, dependent on monsoon, global prices, and government policy.
- Thin margin of safety of 4.04% against the Graham Number.
- 5-year revenue CAGR of 5.53% is far lower than recent 21.48% growth, indicating volatility.
- Regulatory and subsidy risk could compress margins unexpectedly.
AI Analysis
Chambal Fertilisers is a steady earner, not a spectacular one. The numbers speak: return on equity of 21.93% and ROCE of 26.76% are far above what most Indian businesses deliver. With debt-to-equity of just 0.01, the balance sheet is almost pristine. Free cash flow of ₹2,133 crore against a market cap of ₹18,480 crore gives a cash yield above 11%. At a P/E of 9.65, you are paying a modest price for a business that has grown profits at 18.48% recently. The 5-year revenue CAGR of 5.53% reminds me that fertiliser is a cyclical, policy-driven sector; the latest 21.48% sales growth may not persist. Still, the company has made itself a low-cost operator, and promoter holding of 60.85% aligns interests. The Graham number of ₹480.68 is just 4% above the current price, so the margin of safety is not huge on that conservative measure. A DCF estimate of ₹973 indicates deeper value, but I treat that with caution because commodity prices and government subsidies swing wildly. The Piotroski score of 8/9 and Altman Z of 4.26 confirm financial health. I would not call this a wide-moat business; fertiliser is inherently commodity-like and subject to regulatory whims. But with low leverage, high returns on capital, and a reasonable price, it is a suitable vehicle for patient Indian investors expecting fair returns over time. The 2.17% dividend adds a small cushion. I would keep an eye on subsidy policy and monsoon patterns.
Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer